AGP Executive Report

Indonesia Creative Economy: The Ministry of Creative Economy is teaming up with Indonesia Open Network (ION) to help creators sell globally via digital marketing, cross-border trade, financing, IP protection and AI integration. ASEAN Trade & Investment: Indonesia’s investment minister says the Indonesia–Singapore partnership can boost ASEAN resilience, pointing to Singapore as a top FDI source and a key partner for downstreaming, renewables and digital infrastructure. Digital Regulation: A regional policy analyst says ASEAN AI rules are uneven in practice—Singapore leads with capability-building, while Indonesia mixes national guidance with sector oversight. Energy & Industry Tech: Willfar sets up a smart-grids subsidiary in Casablanca to expand energy, smart water management and metering automation across Africa and the Middle East. Environment & Risk: South Kalimantan haze is linked to peatland fires, with authorities citing ongoing suppression efforts. Trade Disruption Watch: Black Sea attacks are disrupting wheat shipments, pushing Asian buyers to seek costlier alternatives. Geopolitics & Sanctions: China rejects U.S. pressure on Iran, warning sanctions won’t solve the issue—an angle that matters for regional energy trade. Mining Markets: Benguet Corp reports a sharp profit jump in H1 on higher gold prices and improved nickel prices and volumes.

Indonesia Electric Motorcycles: Indonesia set four criteria for its National Electric Motorcycle (MOLINAS) push, including 60%+ domestic components, local design/engineering, nickel-based batteries, and affordable pricing to grow a domestic EV ecosystem. Fuel Subsidy Targeting: Finance Minister Purbaya said restricting subsidized fuel purchases for the top income decile could cut energy subsidy spending by about 10%, with Pertalite rules still under discussion. Food Aid Speed-Up (NTT quake): Indonesia is rushing food aid to East Nusa Tenggara by sending trucks before paperwork is finished, with rice requests reportedly scaled up tenfold to meet displaced needs. Disaster Response (BNPB): BNPB began direct assessments in hard-to-reach NTT villages, documenting damaged homes and displacement while pushing aid delivery despite access limits. Transshipment Row: Indonesia denied US claims of transshipment fraud tied to alleged tariff evasion, calling the allegations false. Solar Buildout: The government flagged solar as a green-industry priority, targeting major capacity additions and pushing de-dieselization on small islands. Energy Retail Deal: Sefas agreed to take full ownership of Shell’s Indonesia fuel retail business, keeping Shell branding via licensing while Sefas supplies and runs the network. Maritime/Defense Linkages: Indonesia-linked regional security news also featured India-Japan maritime security deepening, with stronger coordination on sea lines of communication and naval cooperation.

NTT Earthquake Response: Indonesia is still scrambling to stabilize East Nusa Tenggara after the Aug. 15 Flores quake, with tens of thousands sheltering and BMKG warning aftershocks will continue for 21–30 days; the Army has deployed a hospital ship carrying 70 tons of aid plus medical teams, while relief logistics and field hospitals are being expanded. Growth Strategy: The government is pushing new “growth engines” to hit 8% GDP growth, leaning on industrial downstreaming and domestic supply chains, plus tighter natural resource management through bullion bank and export-proceeds optimization. Defense Industry: Indonesia plans to turn Kertajati Airport into a fighter-jet MRO hub to reduce reliance on foreign maintenance and build local aerospace capability. Commodities Watch: Palm oil prices are firming on El Niño supply risk, while Indonesia’s nickel outlook points to capped prices despite reduced ore quotas. EV Policy: The electric motorcycle subsidy is set to return in September as the government finalizes the legal basis. Trade & Logistics: China expands AEO certification and mutual recognition to streamline cross-border customs for more firms.

Energy & Industry Policy: Indonesia will phase out coal-fired power plants gradually to protect industrial growth and grid stability, targeting 15 high-emission units for potential early retirement while accelerating 100 GW renewables to replace capacity. Logistics & Compliance: The government is preparing Weigh-in-Motion (WIM) technology to enforce the zero ODOL rule in 2027, installing weighing points on routes from ports to industrial zones to cut road damage and improve safety. Commodities & Trade: Indonesia plans to launch a Strategic Mineral and Commodities Exchange on Jan. 1, 2027, aiming to let the country regulate domestic commodity prices instead of relying on overseas benchmarks. Aerospace & Defense Industry: Defense Minister Sjafrie Sjamsoeddin says Indonesia’s Kertajati Hercules MRO hub will become a main center for maintaining Air Force fighter jets, building on GMF’s heavy C-130H maintenance and technology transfer with Lockheed Martin. Disaster Response (NTT): Baznas has launched relief operations for the Flores earthquake, including aid transport, healthcare services, evacuation tents, and emergency public kitchens, as field hospitals expand to support injured survivors. Agro-Industry & Exports: Indonesia targets higher value from patchouli oil exports by deepening processing and developing higher-value derivatives, with 2025 essential oil exports rising to US$348.7m. Packaging & Circularity: A global in-mold labels market outlook points to growth through 2035 as recyclability-by-design rules reshape packaging decoration demand. Regional Business Linkages: MinDA and partners held a forum to unlock private sector participation in BARMM and BIMP-Eaga, pushing cross-border enterprise networks.

Indonesia–Kuwait Workforce: Indonesia wants to expand skilled-worker opportunities in Kuwait, with talks expected to cover healthcare, oil & gas, manufacturing and automotive, after only about 6,000 Indonesians currently work there. Energy & Industry: Indonesia’s ESDM plans to trace illegal gold export smuggling from upstream miners to downstream sellers, including identifying financiers and checking permit legality. Logistics: ICTSI’s EJMT and the Indonesian logistics and forwarders group ALFI/ILFA are pushing Lamongan as a transit hub to improve East Java–Eastern Indonesia freight links and cut transport costs. Geothermal Buildout: PLN and PT Cakrawala Kepahiang Geothermal are preparing Kepahiang’s geothermal drilling site in Bengkulu, including road and bridge works targeted to finish by November 2026. Digital & Payments: Bank Indonesia expands domestic credit card use for retail QRIS payments, aiming to reduce reliance on Visa and Mastercard. Markets & Macro: Bank Indonesia says Indonesia’s external debt rose 4.4% y/y to US$453.4bn in Q2 2026, driven by higher public external debt. Earth & Safety: Three active volcanoes erupted in succession across Indonesia, with Mount Lewotobi Laki-Laki at Level III alert.

External Financing Watch: Indonesia’s external debt climbed 4.4% y/y to US$453.4bn in Q2 2026, with public external debt rising as government borrowing increased amid steadier investor confidence. Automotive Demand Mix: Indonesia’s vehicle sales rebounded in H1, but the growth is tilted toward commercial vehicles (pick-ups and trucks), suggesting business demand is driving the recovery more than household purchasing power. Disaster Relief & Food Security: After the Flores/NTT 7.7 quake, universities are mobilizing medical and logistics support, while the government sent Rp100bn in food aid (starting with rice) and boosted NTT rice stocks fivefold. Agriculture Governance: The agriculture minister dismissed 14 officials over alleged graft involving billions of rupiah, as part of a broader integrity push. Energy & Trade Risk: Ships reported attacks near the Strait of Hormuz and the Black Sea, adding pressure to already tight global shipping flows. Payments & Banking: Bank Indonesia expanded its domestic credit card for QRIS use by consumers and businesses, aiming to reduce reliance on Visa and Mastercard. Sustainable Industry: BRIN highlighted palm-waste biogas potential from POME to cut methane and support renewable energy targets.

Digital Payments Push: Bank Indonesia launched the Indonesian Credit Card (KKI) to work with QRIS Scan/Tap, issued by eight banks including CIMB Niaga, aiming to deepen Indonesia’s inclusive digital economy as QRIS hits 65.77m users and 44.86m merchants. Disaster Response: A 7.7 Flores earthquake is followed by 1,576 aftershocks, with deaths rising to 68 and injured at 213; authorities extended a 14-day emergency response and keep search-and-rescue teams on standby. AI Infrastructure Watch: Southeast Asia’s AI data-centre buildout is accelerating, but analysts warn it could become “technical debt” tied to costly GPUs, power, cooling and engineering commitments. Food Prices Pressure: FAO said world food commodity prices edged up in July, led by cereals, vegetable oils and sugar, with palm oil supported by Indonesia’s biodiesel demand. Trade & Compliance: The U.S. flagged “Great Transshipment Scam” risks and is developing an AI enforcement tool, while Singapore and the EU push back on the claims. Energy Transition Angle: Indonesia’s 2027 budget direction leans toward tighter deficits and targeted priorities like solar expansion and an electric motorcycle ecosystem.

Indonesia Credit Cards Push: Bank Indonesia extended a domestic credit card network to individuals with local lenders, aiming to process more transactions onshore and chip away at Visa/Mastercard dominance. Southeast Asia Growth Watch: GDP growth slowed across several major economies in the April–June quarter, with Iran-related disruptions weighing on consumption and manufacturing, even as Indonesia still grew. Fintech Listing Milestone: Advasa Holdings’ Nasdaq direct listing was approved, with trading expected around Aug 18 under ticker ADBT—another sign of fintech momentum in the region. Lithium Market Signals: Pilbara Minerals and IGO were in focus as spodumene supply discipline and shifting battery chemistry reshape lithium pricing and demand expectations. Palm Oil Prices: Malaysia’s palm futures hit a 4.5-month high on El Niño risk, with traders pricing potential supply tightness into 2027. Earthquake Response in NTT: Indonesia declared a 14-day emergency after the Flores 7.7 quake, as rescue and aid efforts ramp up. Food & Packaging Compliance: The EU’s new packaging rules start applying, raising compliance pressure for ASEAN food exporters on PFAS limits and recyclability requirements. Meat Processing Investment: JBS and Indonesia’s Danantara Investment Management agreed a JV with major funding to expand Indonesia’s protein and meat processing capacity.

Disaster Response: Indonesia declared a 14-day emergency for East Nusa Tenggara after the 7.7 Flores earthquake, with the death toll reported at 47 and thousands still displaced; authorities say relief is being accelerated, including emergency food and supply packages and restoration efforts for power and communications. Commodity Governance: President Prabowo said a new state export firm will monitor key commodity shipments to curb underpricing and protect revenue, after earlier plans to centralize exports under Danantara Sumberdaya Indonesia sparked investor questions. Energy & Supply Chain: Pertamina reported progress restoring fuel and LPG distribution in Flores, while Bulog and other state firms moved supplies to affected areas. Industrial Automation: Sri Lankan firm ISF launched a fully automated coconut de-watering system, aimed at boosting productivity and reducing labor dependence for coconut processors in Indonesia and the Philippines. EV Retail Expansion: VinFast and Indonesia’s Gowa Motor Group signed an MoU to build VinFast’s EV dealership network, targeting at least 30 showrooms and service centres. Trade Pressure: A US report flagged “Great Transshipment Scam” risks, placing Indonesia among countries with significant integration with China and warning of tighter scrutiny.

Disaster Response: Indonesia has declared a 14-day emergency response period for the Aug. 15, 7.7 quake off Flores, running through Aug. 28, as search-and-rescue and relief ramp up; nearly 6,000 people are sheltering across Sikka, Manggara, Nagekeo, Bima and Selayar, with damage reported to hundreds of homes and public facilities. Energy & Logistics: Pertamina is gradually restoring fuel and LPG access in Flores, with 32 of 52 gas stations operating and 20 closed due to quake damage, while the government has dispatched 27 tons of supplies and air-dropped thousands of basic food packages to Maumere and other districts. Public Safety & Comms: The National Police has deployed a reinforced SAR team including K-9 units, heavy equipment and portable Wi‑Fi to speed up operations and restore communications in hard-hit areas. Aerospace for Health Access: BRIN is refining the N219 and amphibious N219A ecosystem to support Prabowo’s flying ambulance vision, alongside long-endurance drone development for future emergency logistics. EV Materials Push: BRIN is also developing artificial graphite from coal waste for battery raw materials to strengthen Indonesia’s EV ecosystem. Infrastructure Planning: Prabowo has urged universities to join the Giant Sea Wall project on Java’s north coast, emphasizing technology transfer and pilot testing. Trade Compliance Watch: Indonesia is named among economies flagged by the US “Great Transshipment Scam” report, while Singapore’s MTI says firms must accurately declare origin.

Renewables Push: President Prabowo says Indonesia will add 30 GW of solar power and phase out 13 GW of diesel-fired capacity in 2026, with a plan to expand solar to 100 GW and encourage every village to develop a 1 MW plant where land is available. Disaster Response: After a 7.7 quake off Flores, BNPB reports at least 47 deaths and widespread damage, with tsunami warnings lifted but aftershocks continuing; Indonesia’s Social Affairs Ministry has deployed Rp4.5 billion in relief supplies including tents, food, and medical support. Energy Security & Grid Resilience: The government is also moving to cut fuel import dependence and improve electricity access in remote islands—an approach now under pressure as extreme weather and fires hit parts of Asia. Trade & Agribusiness: Indonesia exported 8.2 tons of Muntok white pepper to the Netherlands, showing how MSMEs are plugging into global supply chains. Digital & Consumer Tech: Google’s new Android sideloading rules tighten developer verification in Indonesia, aiming to curb scam apps.

Disaster Response: A magnitude 7.7 earthquake struck off Indonesia’s Flores coast, killing at least 38 people and toppling buildings, with tsunami warnings later lifted after monitoring showed no major sea-level changes; BNPB says thousands were displaced and aftershocks continue, while Pertamina confirms fuel distribution in Flores is secure after safety checks and temporary outlet suspensions where needed. Industrial Policy: Indonesia moves to set its own mineral reference prices via the Mineral and Strategic Commodities Exchange (BMKS), targeted to start in 2027, aiming to reduce reliance on overseas benchmarks under OJK supervision. Trade & Compliance: Malaysia’s Port Klang Free Zone pushed back on US claims of tariff evasion, saying Chinese-linked cargo presence alone isn’t proof and that origin certification is handled by national authorities. Manufacturing Tech: Rockwell Automation is shifting toward software-led industrial control, embedding AI and cloud-native updates to speed deployment across global plants. Budget Scrutiny: Indonesia’s Shadow Cabinet says Prabowo’s 2027 budget assumptions are overly optimistic and that growth quality is weakening.

Indonesia AI Push: Indonesia outlined a full-stack AI strategy in Yogyakarta, aiming to build capability across energy, infrastructure, chips, talent and applications—not just deploy software. EV & Charging Buildout: The government is accelerating national electric motorcycle rollout (Molinas) and expanding EV charging infrastructure to match faster adoption. Budget for Growth: President Prabowo proposed a 2027 state budget of Rp4.09 quadrillion, targeting 6.0% growth and a 2.40% deficit, with priorities including food sovereignty, energy/water self-sufficiency, downstreaming and industrialisation. Energy & Industry Projects: Bidders are competing for subsea work packages on Inpex’s Abadi LNG project, while Indonesia also pushes power-sector shifts and industrial energy security. Trade & Supply Chains: A US report alleges a “shadow transshipment network” used to evade tariffs, flagging Indonesia among economies with transshipment links. Renewables Shift: Global data shows solar overtook wind in electricity generation in 2025, reinforcing the clean-power momentum Indonesia is betting on.

Indonesia Budget Watch: President Prabowo unveiled the 2027 Draft State Budget, targeting 6% growth, 2.4% of GDP deficit, and eight national priority programmes spanning food sovereignty, energy and water self-sufficiency, education, health, downstreaming/industrialisation, infrastructure, housing and disaster resilience, plus village development and poverty reduction. Healthcare Infrastructure: The government plans to build and revitalize 441 regional general hospitals and add village-level clinics via Red-and-White Village Cooperatives, using telemedicine to cut referrals. Rural Economy Push: Prabowo set a goal of 30,000 cooperatives fully operational by end-2026, with basic utilities, digital inventory and transport to prevent farm and fisheries spoilage. Economic Momentum: Indonesia recorded 5.45% growth in the first half of 2026, the highest in 13 years, with inflation contained and domestic demand supported. Trade Pressure: The US imposed a 10% reciprocal tariff on Indonesian goods under a forced-labour probe, while a White House report flags Indonesia among countries tied to a “shadow transshipment” network used to dodge tariffs. Shipping Costs: Intra-Asia container rates rose 6% to $1,028 per 40ft as weather and Middle East disruption tightened capacity, including a 5% jump on Shanghai–Jakarta.

EV Push: Indonesia launched its Molinas national electric motorcycle program at ALVA’s Bekasi plant, with President Prabowo urging lower financing rates, no down payments and trade-in schemes to cut fuel dependence and speed EV adoption. Budget Watch: Prabowo will present 2027 budget proposals amid falling approval ratings and investor concern over commodity export controls and fiscal credibility, with the free-meals plan under scrutiny. Finance Growth: Singapore’s finance and insurance sector is set to stay supported by stronger credit growth after 6.2% Q2 expansion, with banks citing lending and wealth management momentum. Waste-to-Energy Debate: Danantara’s waste-to-energy push (Rp87 trillion) is criticized for treating symptoms, not the upstream drivers of Indonesia’s rising trash generation and landfill overload. Cyber & Data: ThreatsDay flags a multi-platform guest-access theft campaign targeting Salesforce Experience Cloud and ServiceNow portals, underscoring the need for tighter access controls. Trade & Commodities: U.S. soybean sales to China are strengthening ahead of the export season, while Indonesia’s nickel quota additions are being granted selectively. Security/Regional: India and Indonesia held 12th Army-to-Army talks in Lucknow to deepen defense cooperation and joint training.

Nickel & Downstreaming: Indonesia’s nickel miners say 2026 ore quota add-ons will be granted selectively to smelters short on raw materials, keeping total quotas around 260–270 million tons and raising pressure for a clearer, rules-based revision framework. EV Ecosystem Push: President Prabowo targets mass home-grown EV production by 2028, while the government launches Molinas to build national electric motorcycle capability using nickel-based batteries and a broader local ecosystem. Hazardous Waste Governance: The environment ministry backs a stronger hazardous and medical waste management ecosystem built on traceability, waste mass balance, and consistent enforcement. Trade & Retail Enablement: Indonesia’s Trade Ministry and Shopee roll out a Local Products Acceleration program to boost MSME reach and competitiveness on e-commerce. Food Program Fallout: Reuters reports Prabowo’s free meals scheme is leaving remote kitchen investors buried in debt due to reimbursement delays and shifting payment rules. Logistics Connectivity: Batam–Johor Ro-Ro ferry service is expected to start by mid-2027, pending port readiness and cross-border approvals. Labor Market Skills Gap: Indonesia’s manpower ministry links educated unemployment to skill mismatch, weak soft skills, and limited digital literacy. Maritime Security: Houthi attacks in the Red Sea continue to disrupt shipping, with reports of crew deaths and renewed regional risk.